Would You Expect an Insurance Company in the "Real World

question 32

Multiple Choice

Would you expect an insurance company in the "real world" to sell an insurance policy for exactly the "fairly-priced" level as defined in the text?

• A)Yes, because the fairly-priced insurance policy includes some profit for the insurance company.
• B)Yes, because insurance companies are required to sell their policy at the fairly-priced level by law.
• C)Probably not, because the expected value of profits for the insurance company would be zero.
• D)Probably not, because insurance companies are not in a competitive industry and are able to earn monopoly profits.

---

Definitions:

Timmons Model

A model of entrepreneurship that emphasizes the dynamic balance between opportunity, resources, and team, as the three critical factors in successful venture creation.

Bootstrapping

A method of starting a company using personal finance or operating revenues with minimal outside investment, emphasizing cost-efficiency and lean operations.

Consumer Trends

Patterns or tendencies in consumer behavior that indicate how the choices and preferences of consumers change over time in relation to various factors like market conditions, technological advancements, and cultural shifts.

Product Diversification

This refers to the strategy employed by businesses to increase the variety of products or services they offer to expand into new markets.